New York City employs more than 300,000 employees who dedicate their lives to making our city a better place and serving their fellow New Yorkers. They deserve excellent health care benefits, and that is why the City of New York signed a contract last month to deliver a new health insurance plan for 750,000 employees, pre-Medicare retirees, and their dependents, known as the new NYC Employees Preferred Provider Organization (NYCE PPO) plan.
This new plan will strengthen coverage, expand provider access, and deliver necessary savings at a time of fiscal uncertainty, while maintaining the premium-free coverage and continued high-quality care our employees expect and deserve.
In collaboration with the Municipal Labor Committee, the city went out to bid for this plan for the first time in more than 40 years. The result is the NYCE PPO, jointly administered by EmblemHealth and United Healthcare. Under this plan, we expect to achieve savings of up to $1 billion without increasing costs for employees. As a result of these projected savings, we can continue no employee premiums, no in-network deductibles, and generally unchanged copays — with even lower costs at NYC Health + Hospitals facilities.
These savings can be achieved without a reduction in benefits because we are finally leveraging our buying power to get a better deal. Hundreds of millions of dollars in savings are due to better rates at hospitals under the new plan and more savings will be achieved by running the plan more efficiently.
Rather than two separate plans with two vendors working separately, as in the current GHI-CBP plan, this will be a single plan with the two vendors working as one. That eliminates duplicative claims and allows better management, producing real savings. The NYCE PPO will also focus on managing fraud, waste, and abuse by enhancing systems and programs to prevent or avoid unnecessary payments.
The provider network will also significantly expand. EmblemHealth, the current medical insurance provider, will offer medical and hospital coverage across New York City, Long Island, and seven surrounding counties, increasing local providers from 64,000 to 78,000. UnitedHealthcare will manage care beyond this region, boosting access from just 79,000 to more than 1.6 million providers nationwide including a tripling of mental health providers in New York State.
In short: more providers, more flexibility, and no new costs for members.
The economics of providing health care to employees have become increasingly challenging in recent years with skyrocketing costs. In the last 10 years inflation nationwide has been 32%, and the average employer cost of health plans has increased by 52%. The cost of the city’s largest plan, covering more than 750,000 total individuals, has increased by 109%, despite the city and our unions seeking to improve efficiencies in the plan.
Meanwhile, cost sharing for employees, such as copays, have largely not increased since 2016 and we continue to offer the plan at no premium to employees. Nationwide, only 1% of employers with more than 200 employees charge no employee premium for their health plans. State employees pay $7,000 to $8,500 for family coverage in the Empire Plan, the largest plan in the state health insurance program. Maintaining a no-premium plan without using the city’s buying power as leverage to lower costs would have been unsustainable.
Some claim a self-funded plan is risky, when virtually every large employer in the country (including New York State) has known for decades that self-funded plans provide greater savings without greater risk. Others express vague fears about what might happen in the future under this plan. But we know exactly what will happen if we do nothing: continued cost increases under an outdated plan, eventually forcing the city to impose employee premiums.
It’s especially disappointing to see groups claiming to represent retirees questioning this plan. The NYCE PPO does not affect Medicare-eligible retirees, but will finally provide meaningful provider access to pre-Medicare retirees living outside New York. The current GHI-CBP plan offers just 79,000 providers outside the New York City area — leaving many pre-Medicare retirees with limited options or higher-cost plans. This new plan addresses that gap, offering better care, more choice, and flexibility for those who have or are considering relocating.
Mayor Adams has always been committed to delivering for New Yorkers and our employees, working to ensure they are able to afford to live and raise a family here. Overhauling a decades-old health insurance plan with many stakeholders involved, wasn’t easy, but it was the right thing to do and will benefit those who have dedicated their lives to working for our great city.
Campion is the New York City labor commissioner.
